Too many Canadians forget that there's more to the world of finance than the Big Five Banks. Canadians are so programmed to think about banks when it comes to mortgages that some give up their real estate dreams if the bank turns down their mortgage application or offers them a smaller mortgage than they hoped for.

When one of Canada's Big Five Banks considers a mortgage application, they all want two questions answered:

#1. What is the borrower's ability to service the debt, that is, repay the amount borrowed "the principal" and pay the interest due on the outstanding balance?

Canadians banks set their Gross Debt Service (GDS) ratio at about 28% to 34% of your total before-tax income(s). This means that combined principal, interest and property tax payments must be less than about one-third of your allowable income. However, vulnerable income such as rent from an illegal apartment will probably not be accepted by banks, which may mean a smaller mortgage than you need.

#2. What is the lending value of the real property, that is, the price the real estate would sell for within a relatively short time, usually 60 to 90 days, even in a weak real estate market?

Lending value is a conservative estimate and not automatically equivalent to sale price. Be careful if you get caught up in a bidding war and pay a lot more than list price.

Even if you expect the bank to say "yes," you may want to consider the borrowing suggestions below:

Published: September 28, 1999

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Futurist and Strategist PJ Wade is "The Catalyst" - intent on "Challenging The Best to Become Even Better." PJ earned this title by translating the dynamic impact of Boomers and their multi-generation families into relevant insights that start people thinking and taking action—in business and in life. Author of 8 books and more than 1800 published articles, PJ encourages individuals to become their own futurist. PJ writes and speaks about the insight, knowledge and solid decision-making skills that professionals and their clients need to live and work in this vortex of change. For instance, since PJ knows that home is headquarters for the new decades-long "unretirement," she wrote the popular book "Reverse Mortgages: Best Friend, Worst Enemy...Your Choice!", which is filled with suggestions and cautions on protecting, building and managing home equity. Her new business book, "What's Your Point?: Cut The Crap, Hit The Mark & Stick!" will be published in 2012. As The Catalyst, PJ provides strategic communication, client appreciation and advanced education services to the financial, tourism, lifestyle and service sectors - and the clients they serve. A frequently-quoted financial and business commentator, PJ is a thought-provoking strategic speaker who offers practical, real-life suggestions on leaving "the box" behind and embracing Forward Thinking - a talent she regularly demonstrates in this column. For more on keynotes, blogs, books and information on a range of 21st-Century topics, visit TheCatalyst.com.